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Lecture 2

Week 2
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Department
Commerce
Course
COMM 131
Professor
Ethan Pancer
Semester
Winter

Description
Week 2 Notes Chapter 1pages10-25  Marketing Management: the art of selecting appropriate target markets and building working relationships with them  Value Proposition helps differentiate your product by communicating benefits and values  Production Concept: customer will buy cheap, readily available products, so focus should be on improving production and distribution  Product Concept: customers want high quality products, so focus should be on making continuous product improvements (not including R&D for extreme product changes/new products)  Selling Concept: you must sell aggressively to consumers to get sales (typically practiced for unsought goods)  Marketing Concept: achieving organizational goals depends on knowing the needs and wants of target markets and delivering satisfaction better than competitors do  Selling concept is inward-out, while marketing concept is outward-in (creates profit based on customer satisfaction rather than sales volume)  Societal Marketing Concept: uses the same base as marketing concept, but for the present and future; considers consumers’ wants, company requirements, and consumers’/society’s long-term interests.  Integrated marketing plan and program = four P’s  Customer Relationship Management: overall process of building profitable customer relationships by delivering superior customer value and satisfaction  Delivering high customer satisfaction is important, but this must not be maximized (still need to earn significant profits)  Different levels of customer relationships from basic to full. These can be obtained through general marketing, personal customer care, frequency marketing programs, club marketing programs  Consumers are taking on more interactive roles in marketing. Brands aim to use attraction over intrusion  Consumer-generated marketing uses marketing created by consumer themselves  Marketing is now done throughout the company, both internally and externally through supply chain management  Customer Lifetime Value: entire stream of purchases that the customer would make over a lifetime of patronage  Customer Equity: total combined customer lifetime values of all of the company’s customers  Four different types of customers based on loyalty and profitability: true friends, butterflies, strangers, and barnacles Chapter 1 LearningObjectives 3& 4 3) In a customer driven marketing strategy, the focus is put on customers rather than products or sales. This includes the “marketing concept,” ad the “social marketing concept.” These first identify their target market based on the consumer’s needs and wants, and goes through an integrated marketing process to obtain profit through customer satisfaction. The social marketing concept is a step ahead, as it takes three key points into consideration: society (human welfare), company (profits), and consumers (want satisfaction). 4) Customer relationship management is the overall process of building and developing profitable customer relationships by delivering superior customer value and satisfaction. To create value for customers you must have the right customer-perceived value (customer’s evalueation of the difference between all the benefits and all the costs of a market offering relative to those of competing offers) and customer satisfaction (extend to which a product’s perceived performance matches a buyer’s expectations) must be attained. This is being achieved through more interactive customer marketing. In capturing value from customers, it’s important to create customer loyalty and retention (good customer experience), grow share of customer (become better option of competitors, have customers spend more of their income on you), and build customer equity (customer lifetime values of all of the company’s customers) to keep the brand alive through multiple generations. Chapter 2 Notes  Strategic Planning: developing and maintaining a plan focused around a company’s goals n relation to marketing opportunities. This is done at the corporate level, and translates to unit, product, and market levels Chapter 2 LearningObjectives 1) Company-wide strategic planning involves developing and maintaining a strategic fit between the organization’s goals and capabilities and its changing marketing opportunities. This is a four-step process:  Defining the company mission statement o Mission Statement: statement of the organizations purpose; what it wants to accomplish in the larger environment. o This should be focused around customers, it should be easy to grasp, inspirational, and achievable  Setting company objectives and goals o From the mission statement, you start to see key areas you’ll need to focus on in order to stay true to your goals. If your mission statement encompasses innovation, a good goal would be to increase R&D. This would then be expanded upon – how do we achieve this?  Designing the business portfolio  Planning marketing and other functional strategies 2) A business portfolio is the collection of businesses and products that make up the company. To plan out a good business portfolio, current portfolios must be analyzed, and future portfolios must be developed choosing strategies for growth and downsizing. To analyze current portfolios, a matrix system may be used. This classifies SBU (strategic business units) into categories depending on growth rate and market share.  Question marks grow at a fast rate, but are not yet at a high level of market share  When invested in, many question marks can turn into stars, which have high market share and high growth  When growth of these stars slows, they turn into cash cows, maintaining their market share. Since these require little investment, they fund the other categories  When cash cows, or any other type, loses market share and stops growing, they become dogs Looking towards the future, we can us
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